State Of New Jersey Trade Administration Act

Transcription

1 I I LEGISLATIVE HISTORY CHECKLIST NJSA: 54:32B-3 ' (Direct mail advertising services- certain-- sales tax exemptions) LAWS OF: 1987 CHAPTER: 268 Bill : Sll14 Sponsor{s): Hirkala Date Introduced: Pre-filed Committee: Assembly: Appropriations Senate: Revenue, Finance and Appropriations Amended during passage: Yes Amendments during passage denoted by asterisks. Date of Passage: Assembly: June 8, 1987 Date of Approval: September 11, 1987 Senate: March 19, 1986 Following statements are attached if available: Sponsor statement: Yes Committee statement: Assembly Yes Senate Yes Fiscal te: Veto Message: Message on Signing: Following were printed: Reports: Hearings:

2 L-o~Uf5 o{ ~ 1 '1---//" t7 [OFFICIAL COpy REPRINT] SEN ATE, STATE OF NEW JERSEY PRE-FILED FOR INTRODUCTION IN THE 1986 SESSION By Senator HIRKALA AN ACT exempting certain direct-mail advertising processing services from the sales. and use tax, and amending P. L. 1966, c. 30 and P. L. 1985, c BE IT ENACTED by the Senate and General Assembly of the State 2 of New Jersey: 1 1. Section 3 of P. L. 1966, c. 30 (C. 54:32B-3) is amended to 2 read as follows: 3 3. Imposition of sales tax. On and after July 1, 1966 and con 4 tinuing through February 28, 1970, there is hereby imposed and 5 there shall be paid a tax of 370; on and after March 1, and continuing through January 2, 1983, there is hereby imposed 7 and there shall be paid a tax of 5%; and on and after January 3, , there is imposed and there shall be paid a tax of 6%, upon: 9 (a) The receipts from every retail sale of tangible personal 10 property, except as otherwise provided in this act. 11 (b) The receipts from every sale, except for resale, of the follow 12 ing services: 13 (1) Producing, fabricating, processing, printing or imprinting 14 tangible personal property, performed for a person who directly 15 or indirectly furnishes the tangible personal property, not pur 16 chased by him for resale, upon which such services are performed. 17 (2) Installing tangible personal property, or maintaining, ser 18 vicing, repairing tangible personal property not held for sale in 19 the regular course of business, whether or not the services are 20 performed directly or by means of coin-operated equipment or by EXPLANATION-Matter enclosed in bold.faeed brackets [thus] in the above bid is nol enacled and is inlended 10 be omitted in the law. Malter printed In italics thus I. new mailer. Malter enclosed in asterisks or stars bas been adopted as followlli *-Assembly committee amendments adopted March 9, 1987.

3 I, 1.) 21 any other means, and whether or not any tangible personal prop 22 erty is transferred_ in conjunction therewith, except (i) such ser 23 vices rendered by an individual who is engaged directly by a 24 private homeowner or lessee in or about his residence and who is 25 'not in a regular trade or business offering his seryicesto tlle' public, 26 (ii) such services rendered with respect to personal property 27.(lxempt from taxation hereunder pursuant to section 13 of P. L , c. 105 (C. 54 :32B-8.1), (iii) services rendered with respect to 29 trucks, tractors, trailers or semitrailers by a person who is not 30 engaged, directly or indirectly through subsidiaries, parents, affili 31 ates or otherwise, in a regular trade or business offering such 32.. services to the public, (iv) any receipts from laundering, dry clean 33. ing, tailoring, weaving, pressing, shoe repairillg and shoeshining 34 and (v) services rendered in installing property which, when in 35 stalled, will constitute an addition or capital improvement to real 36. property, property or land. 37 (3) Storing all tangible persomtl property not held for sale ill 38 the regular course of business and the rental of safe deposit boxes 39 or similar space. 40 (4) Maintaining, servicing or repail'iug real property, other than 41 a residential heating system unit serving' not more than three 42. families living independently of each other and doing their cooking 43 on the premises, whether the services are performed in or outside 44 of a b,uilding, as distinguished from adding to or improving such 49 real property by a capital improvement, but excluding services 46 rendered by an individual who is not in a regular trade or business 47 offering his services to the public, and excluding interior cleaning 48 and maintenance services, garbage removal and sewer services per~ 49 formed on a regular contractual basis for a term not less than 30 50; days, other than window cleaning, and rodent and pest control. 51.(5) Advertising services, except advertising services for use 52 dir,ectly and primarily for publication in newspapers and maga 53.zines [, or except when performed i'l'/, connection with the ad 54. dressing, inserting and mailing oj direct-mail advertising mate'rials 9,5 for]* and except for direct-mail advertising processing services 9,5A in connedion. with distribution to out-oj-state, recipients. 5}? Wa,ge,s, salaries and other compensation paid by an employer 57.t,9 :an" employee for performing as an employee the services 58 described in this subsection are not receipts subject to the taxes 59 imposed under this subsection (b).,'. " J,. 60 Services otherwise taxable unclei' paragraph (1) or (2) of this 61 subsection (b) are not subject to the taxes imposed under this

4 3 62 subsection, where the tangible personal property upon which the 63 services were performed is delivered to the purchaser outside this 64 State for use outside this State. 65 (c) Receipts from the sale of food and drink in or by restaurants, 66 taverns, vending machines or other establishments in this State, 67 or by caterers, including in the amount of such receipts any cover, 68 minimum, entertainment or other charge made to patrons or 69 customers: 70 (1) In all instances where the sale is for consumption on the 71 premises where sold; 72 (2) In those instances where the vendor or.any person whose 73 services are arranged.for by the vendor, after the delivery of the 74 food or drink by 01' on behalf of the vendor for consumption off 75 the premises of the vendor, serves or assists in serving, cooks, heats 76 or provides other services with respect to the food or ~rink, except 77 for meals especially prepared for and delivered to homebound 78 elderly, age 60 or older, and. to disabled persons, or meals pre 79 pared and served at a group-sitting at a location outside of the 80 home to otherwise homebound elderly persons, age 60 or older, 81 and otherwise homehol\ud disabled persons, as all or part of any 82 food service project funded in whole 01' in part by government or 83 as part of a private, nonprofit food service project available to all 84 such elderly or disabled persons residing within an area of service 85 designated by the private nonprofit organization; and 86 (3) In those instances where the sale is for consumption off 87 the premises of the vendor, and consists of a meal, or food prepared 88 and ready to be eaten, of a kind obtainable in restaurants as the 89 main course of a meal, including a sandwich, except where food 90 other than sandwiches is sold in an unheated state and is of a type 91 commonly sold in the same form and condition in food stores other 92 than those which are principally engaged in selling prepared foods.; 93 (4) Sales of food and ~everages sold through coin-operated vend 94 ing machine~, at the wholesale price of such sale, which shall be 95 defined as 70% of the retail vending machine selling price, except 96.. sales of milk, which shall not be taxed. thing herein contained 97 shall affect other sales. through. coin-operated vending machines 98 taxable pursuant to subsection (a) above or the exemption thereto 99 provided by section 21 of P. L. 1980, c. 105 (C. 54:32B-8.9). 100 The tux imposed by this subsection (c) sllallnot apply to food or 101 drink which is sold to an airline for consumption while in flight. 102 (d) The r:ent for every occupancy of a room or roonls in a hotel 103 in this State, except. that the tax shall not be idlijosed upon (1) a

5 I I permanent resident, or (2) where the rent is not more than at the 105 rate of $2.00 per day. 106 (e) (1) Any admission charge, where such admission charge is 107 in excess of $0.75 to or for the use of any place of amusement in 108 the State, including charges for admission to race tracks, baseball, 109 football, basketball or exhibitions, dramatic or musical arts per 110 formances, motion picture theatres, except charges for admission 111 to boxing, [sparring or] wrestling [matches or], kick boxing or 112 combative sports exhibitions, events, performances or contests 113 which charges are taxed under ally other law of this State or under 114[R. S. 5 :2-12] section 20 of P. L. 1985, c. 83 (C. 5 :2A-20), and, 115 except charges to a patron for admission to, or use of, facilities 116 for sporting activities in which such patron is to be a participant, 117 such as bowling alleys and swimming pools. For any person hav 118 ing the permanent use or possession of a box or seat or l,ease or 119 a license, oilier than a season ticket, for the use of a box or seat 120 at a place of amusement, the tax shall be upon the amount for 121 which a similar box or seat is sold for each performance or exhi 122 bition at which the box or seat is used or reserved by the holder, 123 licensee or lessee, and shall be paid by the holder, licensee or lessee. 124 (2),The amount paid as charge of a roof garden, cabaret or 125 other similar place in this State, to the extent that a tax upon such 126 charges has not been paid pursuant to subsection (c) hereof Section 1 of P. L. 1985, c. 24 (C. 54:32B-8.39) is amended 2 to read as follows: 3 1. Receipts from sales of advertising or promotional materials 4 which are prepared within or outside of the State of New Jersey 5 for distribution by anew Jersey direct-mail advertising or pro 6 motional firm to out-of-state recipients and receipts from sales of 7 direct-mail advertising ~processing'" services "'[performed on 8 mail]'" in connection with distribution of advertising or promo 9 tional materials'" to out-of-state recipients are exempt from the 10 tax imposed under the Sales and Use Tax Act. The exemption 11 provided by this section shall apply to receipts from charges for 12 the printing or production of advertising and promotional ma 13 terials whether prepared in, or shipped into New Jersey after 14 preparation and stored for subsequent shipment to out-of-state 15 customers. The direct-mail advertising "'processing services ex 16 emption provided by the section shall [include]'" "'apply to re 17 ceipts from charges for all processing services for distribution to 18 out-of-state recipients, including'" but [shall]~ not "'[be] lim Jq ited to the following: preparing and maintaining mailing lists,

6 20 -[preparing and applying mailing labels, folding and inserting 21 materials into envelopes, sorting, bagging, and typing envelopes, 22 and placing materials into the mail servcie]* ~'addr'essing, sepa 23 rating, folding, inserting, sorting and packaging advertising or 24 promotional materials and transporting to the point of shipment 25 by the mail se,rvice or other carrier This act shall take effect immediately. TAXATION - SALES Exempts from the sales and use tax the receipts of direct-mail advertising services performed on mail to out-of-state recipientfl.

7 5 STATEMENT This bill exempts from the sales and use tax the receipts from sales of direct-mail advertising services performed on mail to outof-state recipients. P. L. 1985, c. 24 (C. 54:32B-8.39), effective' January 25, 1985, exempted the sales of the printed materials used in direct- mail advertising to out-of-state recipiellts from the sales and use tax. However, the charges for direct-mail processing services, including labeling, inserting into envelopes and sorting, are taxable. This bill extends the exemption to the service charges of direct mail processors within the State for mailings to out-of-state recipients.

8 I I ASSEMBLY APPROPRIATIONS COMMITTEE STATEMENT TO SENATE, with Assembly committee amendments STATE OF NEW JERSEY DATED: MARCH 9, 1987 The Assembly Appropriations Committee favorably reports Senate Bill with amendments. Senate Bill. 1114, as amended, clarifies the exemption of directmail advertising services performed on mail to out-of-state recipients from tho sales and use tax. Currently, under P. L. 1985, c. 24, printed materials used in direct mail advertising' to out-of-state recipients are exempt from the sales and uso tax. However, the charges for direct-mail processing services, including labeling, inserting into envelopes and sorting were not specifically exempted when P. L. 1985, c. 24 'was adopted. This bill would make clear that such activity is exempt and thereby allow direct mail processors in New Jersey to compete for interstate business with direct mail processors in New York and Pennsylvania, both of which exempt processing costs for mailings to out-of-state recipients from the sales and use tax. The direct mail processing industry in New Jersey currently employs approximately 4,500 people in urban areas. FISCAL IMPACT: A Legislative Fiscal Estimate has been prepared on a similar bill. It is estimated the enactment of this bill would result in a reduction of sales tax revcnues to the State of approximately $1.3 million in FY COMMITTEE AMENDMENTS: The amendments, as recommended by the Subcommittee on Taxation, are technical and clarify the nature of services. The amendments also make this bill identical to Assembly Bill Aca.

9 I I SENATE REVENUE, FINANCE AND APPROPRIATIONS COMMITTEE STATEMENT TO SENATE, STATE OF NEW JERSEY DATED: MARCH 6, 1986 The Senate Revenue, Finance and Appropriations Committee reported Senate Bill favorably. Senate Bill exempts direct-mail advertising services performed on mail to out-of-state recipients from the sales and use tax. Currently, under P. L. 1985, c. 24, printed materials used in direct mail advertising to out-of-state recipients are exempt from the sales and use tax. However, the charges for direct-mail processing services, including labeling, inserting into envelopes and sorting are taxable. This bill would allow direct mail processors in New Jersey to compete for inter-state business with direct mail processors in New York and Pennsylvania, both of which exempt processing costs for mailings to out-of-state recipients from the sales and use tax. According to information available to the sponsor, the direct mail processing industry in New Jersey currently employs approximately 4,500 people, mostly in urban areas. Most of the direct mail processors are relatively small businesses and usually employ people with otherwise limited opportunities. FISCAL IMPACT: A fiscal note has not been prepared for this bill.